Wednesday, October 3, 2007

Time to roll the dice?

Is this a buying opportunity in Las Vegas Sands (LVS)? Maybe. The stock took a nasty fall today when new figures for Macao gaming were robust (55% growth), but not as magnificent as the street had anticipated.

The stock fell nearly 12% to $127, a huge drop from yesterday's intra-day high of 145.

Little more than a week ago, I took a closer look at LVS. Found that I like the new location, the product (I actually stayed at the Venetian in Las Vegas almost a decade ago) and the open field ahead for the stock. But I couldn't conclude that a buy was in order because the stock was technically out of sight. Way, way above its moving averages, and traders who rode a big gain this year could have left the table with fat profits.

With today's plunge, the stock is well below its 10-day simple moving average (135) but still far above its 50-day SMA (107). So, is LVS a buy here?

I think the impact of the Macao numbers isn't over yet. I think there's still too much profit on the table for some traders to let this one ride. So I'm going to keep watching until LVS finds a floor. If the stock levels out and starts riding back up, I won't mind losing a few points. Trading or investing in Asia is still a fairly decent hedge against a slowing U.S. economy, and there is far too little exposure to that region in my portfolio.

Pupule says: Buy small, if at all, and/or wait for a) a better price, or b) a return by the bulls. There's a reason why I graded LVS as a B+ rather than an A or A- 11 days ago. There's no need to gamble here.

Ain't it true?

What I had to do was to find stocks that would be hoisted up because they stirred people's imagination for the future. ... I was not interested in the company's individual products, whether it was metals for rockets, solid fuel, or advanced electronic equipment. In fact, I did not want to know what they made—that information might only inhibit me. I did not care what the company's products were, any more than I was influenced by the fact that the board chairman had a beautiful wife. But I did want to know whether the company belonged to a new vigorous infant industry and whether it be haved in the market according to my requirements.

This, of course, was directly against the advice of many financial writers with conservative backgrounds who have been pounding into investors for generations that they must study company reports and balance sheets, find out all they can about a stock's background, in order to make a wise investment. I decided that was not for me. All a company report and balance sheet can tell you is the past and the present. They cannot tell the future. And it was for this I had to project my plans.